NH ranked as patent-rich in national report

BJ Lanigan of Concord, who's a third-generation machinist, works at a milling machine at DEKA's Manchester Millyard headquarters on Friday. (DAVID LANE/UNION LEADER)

BAE Systems in Nashua was granted 53 patents in 2011 by the U.S. Patent Office, mostly for radar and radio navigation technology - the most of any business in the state.

Oracle International Corp., also in Nashua, placed second with 44 patents for database and file management or data structures software.

A much smaller Manchester company owned by inventor Dean Kamen, DEKA Products, was third with 34 patents, mostly for medical and laboratory equipment.

They were the top three of 24 companies in the Manchester-Nashua area whose combined 357 patents in 2011 made the area one of the most invention-rich communities in the country, according to research by the Brookings Institution released on Friday.

"Patenting Prosperity," the first analysis of its kind, studied patent trends from 1980 to 2012, ranking all of the nation's roughly 360 metropolitan areas on patenting activity and analyzing how patents affected productivity and prosperity.

Manchester-Nashua placed well in the survey, ranking 29th, based on the number of patents applied for per capita from 2007 to 2011. The top five metropolitan areas in order were San Jose, Calif.; Burlington, Vt.; Rochester, Minn.; Corvallis, Ore.; and Poughkeepsie, N.Y.

Boston was ranked 34th, while the country's two biggest cities, New York City and Los Angeles, placed 77th and 56th, respectively.

The study was made possible when the Patent Office recently digitized records as far back as 1975. Researchers at Brookings compared the patent data with economic growth and development measures to demonstrate a relationship between the number of patents issued in an area and economic prosperity over time.

Their study concluded, among other things, that patents generate jobs - maybe not the year they are issued, but five and 10 years down the road.

"The main message is that invention is a major driver of regional economic growth," said Jonathan Rothwell, senior research associate at the Washington, D.C.-based think tank and a co-author of the study. "R&D is the goose that lays the golden egg. It creates new companies and new products that drive economic growth and create tax revenue."

Encouraging research

The report comes out just as the state Legislature moves toward doubling the tax credit available for research and development in the Granite State and making the credit a permanent part of the state's tax structure.

The legislation designates $2 million a year to fund the credit, which is applied to the state's business profits tax or business enterprise tax, up to a maximum of $50,000 per business.

It has been enormously popular in the business community, with more than 100 applications for the credit in the past tax year, according to Christopher Way, interim director of the state Division of Economic Development.

The tax credit expansion passed the Senate, 23-0, on Thursday, enjoys widespread support in the House and is expected to be signed into law by Gov. Maggie Hassan.

It's exactly the kind of incentive that Rothwell says state policymakers should encourage if New Hampshire is to retain its ranking in the top 10 of all 50 states when it comes to patents per capita. New England had three states in the top 10, with Massachusetts ranked third, Vermont, fourth, and New Hampshire, ninth. Vermont has a large IBM research center near Burlington.

"The major message here is invest in your innovation capacity," said Rothwell, "and that's a message a lot of places need to hear because during the 1990s and 2000s, a lot of places became convinced that the way to economic prosperity was to make their region more consumer-friendly and to raise the amenities that their region provides."

Wrong public investments

He suggested that public money invested in sports stadiums, convention centers and arenas has been misplaced. "Investments that only result in more consumption cannot be the foundation for economic growth because they really just transfer money from one mode of spending to another," Rothwell said. "Whereas investing in research capacity that will lead to new companies, and new technologies will bring new money."

As an example, he cited a project under way in New York City, which granted public land on Roosevelt Island to Cornell University for a new research and development center.

"Instead of setting aside huge tracts of public land for convention centers and stadiums, why not set them aside for research institutions and find a partner who is willing to invest with you?" he said.

Redevelopment of the Manchester Millyard, where New Hampshire innovation helped spur the Industrial Revolution, attracted companies like DEKA to continue that tradition.

"New England was the center of innovation historically and remains a distinctly innovative part of the country," Rothwell said.

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